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Government Actions
NY Attorney General Announces Settlement
NEW YORK – New York Attorney General Letitia James today announced a settlement with a network of 25 predatory lending companies controlled by Yellowstone Capital (Yellowstone) and its officers that will deliver over $534 million in debt relief and provide at least $16 million in restitution to small businesses across New York and the country that Yellowstone targeted with illegal high-interest loans. The settlement includes a $1.065 billion judgment against Yellowstone, with over $534 million of that paid by canceling all outstanding debts owed by 18,000 small businesses nationwide. The companies and the officers also immediately paid $16.1 million to be distributed to impacted small businesses. The Yellowstone companies will be liable for the remaining $514 million of the judgment.
Under the settlement announced today, the Yellowstone entities are canceling all amounts owed by merchants, totaling $534,552,724. The Yellowstone entities are required to cease all attempts to collect on balances owed by businesses they lent to, discontinue pending actions to enforce them, vacate unsatisfied court judgments, and terminate some liens on small businesses’ property. The companies and the officers will also be permanently banned from the merchant cash advance industry.
Important Information
Government Actions
The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.
NEWARK – January 3, 2023
Attorney General Matthew J. Platkin announced today that the State has reached a $27.375 million settlement with Yellowstone Capital LLC, its parent company Fundry LLC, and six other associated companies to resolve the allegations that the companies targeted small businesses with unconscionable, misleading, and abusive lending, servicing, and collection tactics that caused financial harm through their merchant cash advance (“MCA”) business.
As part of the settlement, all New Jersey customers who entered into MCA agreements with these entities will have their outstanding balances forgiven, worth an estimated $21.75 million. The remaining $5.625 million will be paid to the Division of Consumer Affairs for restitution to certain New Jersey customers, civil penalties, attorneys’ fees, and costs.
The State alleged that Yellowstone Capital and Fundry, as well as Yellowstone-affiliated entities High Speed Capital LLC, World Global Capital LLC d/b/a YES Funding, HFH Merchant Services LLC, Green Capital Funding LLC, MCA Recovery LLC, and Max Recovery Group LLC (collectively, the “Yellowstone Respondents”), acted together to cheat financially-strapped small businesses and their owners out of millions of dollars by luring them into predatory lending arrangements disguised as cash advances on future receivables, effectively charging interest rates far exceeding the interest rate caps in the State’s usury laws.
The State further alleged the Yellowstone Respondents then doubled down on their abuse of merchants through numerous unconscionable, deceptive, and fraudulent servicing and collection practices that drove these small businesses and their owners into financial distress and often default.
Service Area
- 07302
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